Mr. Speaker, I want to start by thanking all parties for the support they have provided for this bill. There are some minor administrative amendments that would allow the diamond industry, which is so important to Canada, to keep functioning.
Bill S-36 is designed to amend the Export and Import of Rough Diamonds Act. The act provides controls for the export and import or transit across Canada of rough diamonds and enables the implementation in Canada of the International Kimberley process certification scheme for the trade in rough diamonds.
Before discussing the bill itself, I will give a brief overview of the steps that have been taken by Canada in the international community in connection with the rough diamond trade.
The international community is still greatly concerned about the link between the illegal rough diamond trade and the financing of armed conflicts, particularly as occurred in Angola, Sierra Leone and the Democratic Republic of Congo.
While conflict diamonds constitute a very small percentage of international diamond trade, they have a devastating impact on peace, security and sustainable development in the affected countries. With leadership from Canada, the United Nations has taken several initiatives to address this problem. As far back as 1998, the Security Council imposed sanctions prohibiting the import of rough diamonds from Angola that were not controlled through an official certificate of the original scheme.
During its term on the UN Security Council in 1999 and 2000, Canada played a key role, as chair of the Angola sanctions committee, in pressing for measures to strengthen implementation of these sanctions. These measures laid the foundation for the adoption of additional sanctions on Sierra Leone, which placed similar restrictions on rough diamond imports from that country.
In December 2000 and again in March 2002 the United Nations General Assembly passed resolutions, of which Canada was one of the sponsors, calling for the creation of an international rough diamond certification program to tighten up measures to control the rough diamond trade and prevent illicit diamonds from getting into legitimate markets.
At the June 2002 Kananaskis summit in Canada, under the G-8 plan for Africa, G-8 leaders reiterated their support for the international efforts made to identify the link that exists between the development of natural resources and conflicts in Africa, including the monitoring measures developed under the Kimberley Process.
The Kimberley Process was initiated in May 2000 by several south African countries. In addition to responding to the international pressure to address peace and security concerns, the process protects the national economies of several south Africans countries, including Namibia, Botswana and South Africa, that are highly dependent on the diamond industry.
Over the course of nine plenary sessions and two ministerial meetings, the process developed detailed proposals for an international certification scheme for rough diamonds.
In March 2002 Canada hosted a meeting of the Kimberley Process that achieved consensus on the proposals in the scheme. The scheme was seen as taking the form of an international political understanding rather than a legally binding international agreement.
At the meeting held in Switzerland in early November 2002, participating countries made a commitment to simultaneously implement the scheme at national levels on January 1, 2003.
In order for Canada to follow through on this commitment and implement the Kimberley Process certification scheme on a solid legal foundation, the Government of Canada established the Export and Import of Rough Diamonds Act. The act came into force January 1, 2003, under the authority of the natural resources minister.
Canada's Export and Import of Rough Diamonds Act provides the authority to verify that natural rough diamonds exported from Canada are non-conflict. It also gives the authority to verify that every shipment of natural rough diamonds entering Canada is accompanied by a Kimberley Process certificate from the exporting country, again certifying that diamonds have a non-conflict source.
There are also trade restrictions whereby trading rough diamonds from non-participating countries are prohibited.
I might just stop to answer a specific concern with respect to persons only having a certificate by weight. People could mix valid diamonds with low quality blood diamonds so that system would not work. However certificates in Canada also have the value and carats of the diamond. It would be very hard to replace one shipment with the other because it has to add up to the same weight and value. There are also a number of other certificates in the process so that items can be matched.
The importance of these amendments is so we can publish our statistics and compare them with other countries and our imports will match with their exports.
The Kimberley process remains today as the principal international initiative established to develop practical approaches to the conflict diamond challenge. The process now includes 45 participants, including the European Union, involved in producing, processing and marketing of rough diamonds. The participants account for 99.8% of the global trade in and the production of rough diamonds. They include all of Canada's major diamond trading partners.
The implementation of the Kimberley process has demonstrated significant benefits in curbing illicit trade in rough diamonds. For example, Sierra Leon's certified exports in 2004 were valued at $155 million versus $10 million in 2000.
Although Canada's status as an important diamond producing country is recent, this industry currently provides an estimated 4,000 direct and indirect Canadian jobs. Mine production in 2004 is estimated to be valued at $2.1 billion Canadian, ranking Canada as the world's third most important producer of diamonds by value.
This only marks the start of Canada's diamond history. More mines are scheduled to come into production in the coming years. These include the Jericho mine in Nunavut in 2006; the Snap Lake mine in the Northwest Territories in 2007; and the Victor mine in Ontario in 2008. These and other advanced exploration projects located in the same areas, and also in Quebec and Saskatchewan, will ensure prosperous times to come for the economy of many regions. These include aboriginal communities as well as major Canadian cities as hubs for the financial markets, equipping and manufacturing companies and allied industries.
Coming from a northern riding I am very delighted that many of the jobs in the diamond mines at the moment are provided to northerners and to aboriginal peoples of the north.
In addition to diamond mining, a small diamond cutting and polishing industry has grown in Yellowknife, Vancouver, Toronto and in Montreal and Matane, Quebec.These operations have important training components which include a number of aboriginal apprentices.
Because the Kimberley process is in its early phase of operation, shortcomings which impede its effectiveness were noted and addressed at the Kimberley process plenary meeting in Gatineau, Quebec from October 27 to October 29. I attended those meetings and it was wonderful for Canada to be hosting such an important initiative.
For Canada to be compliant with the Kimberley process as per the modifications brought forward at the plenary meeting, the following amendments to the act are required: introduce a provision to enable the publication of the Canadian Kimberley process certificate, based import and export statistics collected through the Kimberley process certification scheme; and change the definition of the term “rough diamond” as defined in the act to provide ministerial powers to exclude classes of diamonds prescribed by regulation from the scope of the Kimberley process certification scheme.
With regard to the first amendment, under the Kimberley process scheme participants are required to submit trade data in order to facilitate the identification of irregular trade activity. This is a foundation of the certification scheme. Most participants submit trade data based on Kimberley process certificates. However Canada is currently one of only a handful of participants who do not submit Kimberley process certification based trade data as it does not have the authority to do so. Canada submits the official trade statistics published by Statistics Canada, which, because of definitions, differ from Kimberley process certificates.
Statistics Canada's rough diamond trade statistics are customs based and measure rough diamonds imported and exported from Canada as a result of a financial transaction. On the other hand, Kimberley process trade statistics, derived from information on Kimberley process certificates, measure the flow or movement of all rough diamonds entering and leaving the country.
For example, exploration samples, technical valuations or rough diamonds that are shipped for events such as trade shows are not included in Statistics Canada's trade volume data because the rough diamonds have not been sold to anyone, that is, no financial transactions have taken place. However they are included in the Kimberley process certification based trade data since all rough diamonds entering or leaving the country must be accompanied by a Kimberley process certificate.
At the Kimberley process plenary meeting in October 2004, participants recognized that the statistics derived from different sources are hindering the comparability and analysis of the trade data and, consequently, the effectiveness of the Kimberley process certification scheme. For this reason, Partnership Africa Canada has been quite vocal in having Canada amend its act to enable the publication of Kimberley process certification based trade data.
Further, as Canada chairs the Kimberley process working group on statistics, it is important that we lead by example. NRCan has confirmed with Statistics Canada that the latter does not have any problems with the Kimberley process certification based trade statistics being published in addition to its trade data as long as they are appropriately sourced, which they will be.
The second amendment, to change the definition of the term “rough diamond” as defined in the act, and to provide ministerial powers to prescribe the classes of diamonds to be excluded from the definition of “rough diamond”, is required to comply with a change adopted by the Kimberley process plenary meeting, which limits the applicability of the Kimberley process certification scheme to diamonds equal to or larger than one millimetre in dimension. This decision was made to remove unnecessary administrative burden on the Kimberley process certification scheme as the smaller diamonds are of too little value for illicit trade.
As concerns the exclusion of the smaller rough diamonds from application to the Kimberley process, we propose to set the sizing criteria through a regulation.
Some concerns have been expressed about addressing this issue through regulation rather than in the legislation itself. There are four important reasons why this should not be an issue.
First, changes to the Kimberley process certification scheme are adopted by all Kimberley process participants on a consensual basis. Canada has no discretion on whether to implement these changes if it is to remain a participant in the process and not to disrupt Canadian trade in rough diamonds. Therefore any regulation will have to conform to the requirements of the international process.
Second, dealing with the Kimberley process guideline through a regulation provides additional checks and balances as the regulation development process requires public consultation, as well as a review by the Standing Joint Committee for Scrutiny of Regulations which reviews and scrutinizes regulations on the basis of legality and procedural aspects.
Consultations will take place with all stakeholders, including producers, importers and civil society, to ensure that the regulation is practical to implement and that, at the same time, it meets the intent of the Kimberley process guideline.
Third, the regulation is technical in nature and will require input from the industry to ensure the wording of the regulation meets the intent of the Kimberley process but at the same time is practical to implement and enforce.
The diamond industry uses sieves to separate its diamonds into different size fractions, and we understand that the sieves currently in commercial use do not result in 100% separation between diamonds one millimetre or longer and those less than one millimetre. Therefore the wording of the regulation must address this issue.
Finally, should the Kimberley process decide to alter the technical guideline related to the size for any reason, Canada would be in a good position to comply without going through a legislative process.
Because the bill is technical in nature, it was first introduced in the Senate on May 19, 2005. It was eventually referred to the Senate Standing Committee on Energy, the Environment, and Natural Resources and passed by the Senate without amendments on June 20, 2005.
Both the mining industry and the diamond cutting and polishing industry are dependent on access to export markets and this access depends on Canada's participation in the Kimberley process.
I am looking for support for this bill in order to signal to Canadian stakeholders and to the international community that Canada is moving ahead to comply with the evolving requirements of the Kimberley process certification scheme.
A mandatory review of the Kimberley process certification scheme will be held next year and led by foreign affairs. Meetings will be held the following year where it will be looked at again. In 2007 the plenary would approve it and it would get back to Parliament in 2008. Any other improvements that come out of that whole process and our experience over the years will be added at that time.
However these two amendments are critical to getting it right so we are not out of compliance with other countries. They would protect Canada's important diamond industry.
The only other point that has come up in debate related to whether the elements of the certificate were concrete enough. The Kimberley process is not the only way diamonds are monitored in Canada. Criteria such as value and weight are also involved. Various other documents accompany diamond transactions in Canada. As a result of what is already in place, it is hard to exchange illegal or blood diamonds for other diamonds.
I would like to commend opposition and government members for taking part in this debate. A number of members have added some very important background information with respect to the terrible tortures, amputations and murders that have occurred because of blood diamonds. All parties have supported this legislation in order to get it through quickly so Canada can remain a leader in ensuring we have a valid and successful diamond industry which is important to our economy, some of which is in the big cities but most of it in the north, and the economy of our aboriginal peoples.